Medical Properties Trust: A Possible Short Squeeze Likely Won't Change The Matter

Summary

  • MPW decided to devote an entire paragraph in its risk section (10-K) to the factor that could potentially benefit the stock's price - a possible short squeeze.
  • Indeed, the probability of a short squeeze in MPW stock is highest right now, but the medium-term performance of the stock itself isn't related to this rather rare event.
  • In my opinion, as short positions gradually decrease over time, the stock's performance tends to align more closely with its underlying fundamentals and the behavioral patterns of existing shareholders.
  • I think the company has a fundamental explanation of its ugly price action - and it's not about short sellers. MPW is still losing out significantly to individual industry peers, although the price looks cheap at first glance.
  • I suggest income-seeking investors look for opportunities in thousands of other tickers, many of which appear far more stable than Medical Properties Trust.
  • Looking for a helping hand in the market? Members of Beyond the Wall Investing get exclusive ideas and guidance to navigate any climate. Learn More »

Short Squeeze stock chart illustration

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Medical Properties Trust (NYSE:MPW) is perhaps the most controversial company, not only among its lesser-known peers but also among most of the other stocks covered on Seeking Alpha.

I have previously discussed the stock on two occasions. In my

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This article was written by

12.81K Followers
Daniel Sereda is chief investment analyst at a family office whose investments span continents and diverse asset classes. This requires him to navigate through a plethora of information on a daily basis. His expertise is in filtering this wealth of data to extract the most critical ideas. He runs the investing group Beyond the Wall Investing in which he provides access to the same information that institutional market participants prioritize in their analysis. Learn more.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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